Last week, I introduced the concept of growth mode vs maintenance mode, and I made the point that you should have a mindset where you’re always in growth mode, and not simply treading carefully and being conservative in your decision making, waiting for the right time to be in growth mode.
I want to continue that theme today by sharing with you my top six most important aspects of staying in growth mode.
To be in growth mode, you need to be driven and consistently creating high value. It’s not for the faint-hearted. You must make it happen, not wait for it to happen. Some people seem to just plod through life waiting for the day they win the lotto. That attitude is not going to cut it here. You’re either all in or you’re out.
So, here are my top six most important aspects of staying in growth mode:
1. You have to be growth-minded – always!
This is not optional. I meet business leaders all the time who are happy to have a growth attitude when things are booming but switch to maintenance mode when times seem tough. Wrong! If you have a productivity and growth attitude, have strategic planning in place, know your market and where you are going, there is no need to become conservative when times get tough. In fact, it’s imperative that you are in growth mode when this happens.
2. Focus on the basics.
Keep things simple and focus on executing well. Make sure your team has this attitude too, both your internal team and any support you outsource.
3. Have effective communications systems.
You need to have effective systems in place that allow you to communicate quickly and easily with your current and future clients. These days everybody is hung up on Facebook, Twitter and the like, and they can be powerful tools, but always keep in mind the goal is effective communication and not just being popular.
4. Have effective operating cash flow management.
This is vital. Without this I can just about guarantee you will not survive. It doesn’t matter how many clients you have or how great your products are, if you can’t pay your bills you are going out of business. (See previous chapter for more on this.)
5. Manage the hard decisions.
When it’s time, you need to wield the axe. You are a leader in your business and that comes with the responsibility to make tough decisions. You need to embrace this mindset. If you don’t accept this role, your hesitation and inconsistency when making decisions will cause confusion. This will cause you to fail. If you can’t do it, how can you expect your team to? If you can’t manage this, you shouldn’t be in business. (Brutal truth, remember?)
6. Create a positive environment.
If you operate in fear of losing clients, if you don’t back yourself, if you don’t go to the cliff’s edge, if you don’t do the things that separate you from the competition, if you don’t push yourself and your business to be the best you can be, you will die. If you operate with a positive outlook and an attitude of abundance you can thrive and grow.
But what about when times get tough?
When I tell business leaders that they always need to be in growth mode, they often ask me, ‘But what about when times are tough?’ My response is: ‘Which part of always did you not understand?’
Too many business leaders allow themselves to be a victim of the environment around them. If you have helped to build a robust business, you know your target market intimately and what clients want from you, and you know how to deliver. Tough times will bring you no fear.
Let’s use my own business as an example.
I know that in Australia there are 2.2 million SMEs that have an ABN and are turning over between $700,000 to $10 million a year. That’s a huge target market! And I want to serve 1,000 of them a month. Have a think about that. That’s 0.045% of the market. That constitutes great success for my business. I know this because I’ve done my numbers and my planning. So, let’s say the economy slows down a bit and some small businesses close their doors. Let’s say that after a couple of years of churn and burn there are only 2 million small businesses in Australia. How much does that affect me?
Now I’m after 0.050% of the market – there’s not much difference is there? If I wake up each day and have 2 million potential clients out there – game on! That’s awesome! What tough economy? And that’s just Australia – there’s also the rest of the world.
During the GFC several years ago, plumbers weren’t getting enough work on construction sites and so they were starting to do drain clearing for ridiculously cheap prices because they didn’t have any other work.
One of my clients, The Drain Man, had at this point elevated the industry, but suddenly he was competing with these guys who were fighting for a dollar. He lost a bit of market share. What did he do? He could have dropped the quality of his own services and then dropped his prices in an effort to compete.
Instead, he stuck to his guns and started knocking on the door of some potential A-grade clients. He had to go backwards to go forward, but by continuing his high-quality presence and marketing strategy of being the go-to guy for drain clearing, he didn’t need 200 jobs every day, just 20 good ones.
You must be clear about who you are and what you do, and how you create value. You must build your reputation and keep on building. You must provide maximum results in minimum time; that’s not about being in a hurry, it’s about getting the results first time, every time. It’s about creating value for the people you have chosen to serve.
Ensure you maintain free operating cash flow. Keep building your reputation. Sometimes when things get tough, people automatically turn to survival tactics, without a strategy or belief that they are better than this. Yes, we need to get through tough times, but we don’t need to throw out all our hard work and forget who we are and what we do. You may have to take a job with lower profitability to get you through the month, but don’t throw everything out and make this your long-term strategy. Before you know it, you will be in a pool of sharks and you’ll get eaten.
When they zig, you have to zag.
If you’re an A-grade business you know where the diamonds are, and you just need a handful of them. You need to be clear about your market position and size and then compare that to your goals, and know the direct relationship between them. When you’ve found the right target market and know your numbers, tough times won’t worry you.
Here’s another thing to think about: when times are bad, some of your competitors will close their doors. If you’re a roof tiler, there might not be as many houses being built, but are there going to be no houses built? Of course not! People will still need roofs on houses, just not as many. So, who is going to go out of business? It will be those who lack clarity, don’t have strategic plans in place, have low productivity, don’t know who their target market is or how to reach them, those who switch to maintenance mode at signs of trouble and don’t have solid operating foundations in place – they are the ones that will go belly up. If you want to come out the other side, make sure this isn’t you! Don’t run for the hills with your white flag. Let everybody else do that. You’ll be the one left standing – and thriving.
Having a growth mindset at such times is just as important as when things are going well. You have made your plan – stick to it. Think about our pilots flying to LAX. If they encounter a storm along the way and have to adjust their course, they don’t then say, ‘Hey, now I guess we’re going to Bangkok’. They know where they are going and they stick to their destination. Their plans for the flight have taken into account that there might be storms along the way so they are not knocked off course. When the economy looks shaky or a business runs into trouble the knee-jerk response of many leaders – of businesses small or large – is to cut costs, and usually this is done by cutting staff and closing stores. But cutting expenses will never get you out of a hole, it will just confirm that your business is going in the wrong direction. If you have the right people around you, how does getting rid of them help your business?
The other reflexive response is to throw money into advertising, but again this doesn’t help, it just makes the business leaders feel like they are ‘doing something’. But throwing $10,000 at an ill-conceived and desperate ad campaign won’t get you the customers you need. It’s a sign of a business that doesn’t know who its target market is or how to reach it. That’s not a focused business plan; that’s pin the tail on the donkey.
Growth mode is about planning, and maintenance is not planning. Are you at your full potential? It’s not about who is the smartest, it’s about recognising the void and filling it. I’ve seen plenty of people smarter than I am fail at running businesses. When the opportunity moves from the head to the heart you will move forward. When you fully own and take responsibility for what you are doing, and when you are totally committed, good things will start to happen.
Go slow to go fast.
Power to you!
Founder, CEO - Business Benchmark Group
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Stefan Kazakis on 5 May 2018
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